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Many have derided Microsoft’s decision to offer the subscription-based Office 365 An Introduction to Office 365 -- Should You Buy Into the New Office Business Model? An Introduction to Office 365 -- Should You Buy Into the New Office Business Model? Office 365 is a subscription based package that offers access to the latest desktop Office suite, Office Online, cloud storage, and premium mobile apps. Does Office 365 provide enough value to be worth the money? Read More next to Office 2016, but I think it’s great. Contrary to what most think, Office 365 is not a greed-driven move to wring more cash out of gullible users. The two serve different audiences, and they both provide value.

But which one is the better value?

In this post, we’ll compare Office 365 to Office 2016 and help you decide which one is actually more cost-effective for your needs. For the comparisons, we’ll be using the cheaper year-to-year plans instead of the month-to-month plans because there aren’t many situations where you’d only need Office for a month.

Key Differences in Office 365 vs. Office 2016

The two varieties of Microsoft Office are fundamentally different in terms of what you’re buying, who can use the apps, and how long you get to keep access.

Office 365 is a per-user subscription 5 Office 365 Myths Dispelled 5 Office 365 Myths Dispelled What's stopping you from buying Office 365? If it's not the price alone, maybe it's one of five common misconceptions. Read More . Not only can you install the Office apps like you would normally, you can install them on as many devices as you want: Windows, Mac, Android, iOS, etc. All installed apps are tied to your account. All apps receive updates while your subscription remains active How to Manage Your Office 365 Subscription How to Manage Your Office 365 Subscription Getting to grips with Office 365? Make sure you're in complete control of your account and subscription settings with this guide. Read More .

Office 2016 is a per-PC one-time purchase. You purchase a single suite of apps that can only be installed on one machine, but anyone who has access to that machine can use the Office apps. The installations are not tied to an account. Future versions of Office will still need to be bought as they are released.

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Value Comparison for Home Users

As a home user, you have four potential options:

  • Office 365 Personal ($70 per year)
  • Office 365 Home ($100 per year)
  • Office 2016 Home & Student ($150 one-time purchase)
  • Office 2016 Home & Business ($230 one-time purchase)

What You Get With Office 365

If you opt for Office 365, the main difference is that the Personal plan is for one user while the Home plan is for five users. They both come with seven Office apps in desktop and mobile versions with no limitations or restrictions:

  • Word 2016
  • Excel 2016
  • PowerPoint 2016
  • Outlook 2016
  • OneNote 2016
  • Publisher 2016 (PC only)
  • Access 2016 (PC only)

The Office 365 plans also come with OneDrive and Skype. If you’re on the Home plan, these benefits apply to each of the five users:

  • 1 TB of OneDrive storage (compared to 5 GB for free users)
  • 1 hour of Skype credit per month

What You Get With Office 2016

On the other hand, you don’t get nearly as much with either version of Office 2016. You get up to five desktop Office apps but none of their mobile versions, and you miss out on the extra OneDrive storage and Skype minutes. The five Office apps you get:

  • Word 2016
  • Excel 2016
  • PowerPoint 2016
  • OneNote 2016
  • Outlook 2016 (Home & Business version only)

In essence, Outlook 2016 costs $80.

To equalize Office 2016 with Office 365, you’d need to purchase Publisher 2016 ($110) and Access 2016 ($110) separately in the Microsoft Store, as well as a OneDrive plan and Skype credits. Note that OneDrive only offers a 50 GB storage-only plan, so that’s what we’ll use.The previously-available 100 GB and 200 GB plans are gone. The 1 TB plan is only available with Office 365.

Note that mainstream support for Office 2016 ends in October 2020 (i.e. stops receiving feature and performance updates) and extended support for Office 2016 ends in October 2025 (i.e. stops receiving security and reliability patches). Keep this in mind as you’ll probably want to upgrade to the next version of Office around then.

Over 1 Year

Office 365 Personal costs $70 for one user.

Office 365 Home costs $100 for five users.

Office 2016 Home & Student costs $150 for one PC. OneDrive 50 GB costs $24 for one year. Skype costs about $17 for 12 hours. Total cost is $191 for Word, Excel, PowerPoint, and OneNote (or $411 with Publisher and Access).

Office 2016 Home & Business costs $230 for one PC. Same annual costs for OneDrive and Skype. Total cost is $271 for Word, Excel, PowerPoint, OneNote, and Outlook (or $491 with Publisher and Access).

Over 5 Years

Office 365 Personal costs $350 for one user.

Office 365 Home costs $500 for five users.

Office 2016 Home & Student costs $150 for one PC. OneDrive 50 GB costs $120 for five years. Skype costs about $85 for 60 hours. Total cost is $355 for Word, Excel, PowerPoint, and OneNote (or $575 with Publisher and Access).

Office 2016 Home & Business costs $230 for one PC. Same annual costs for OneDrive and Skype. Total cost is $435 for Word, Excel, PowerPoint, OneNote, and Outlook (or $655 with Publisher and Access).

Over 10 Years

Office 365 Personal costs $700 for one user.

Office 365 Home costs $1,000 for five users.

Office 2016 Home & Student costs $150 for one PC. OneDrive 50 GB costs $240 for 10 years. Skype costs about $170 for 120 hours. Total cost is $560 for Word, Excel, PowerPoint, and OneNote (or $780 with Publisher and Access). Want to upgrade after five years? Add another $150.

Office 2016 Home & Business costs $230 for one PC. Same annual costs for OneDrive and Skype. Total cost is $640 for Word, Excel, PowerPoint, OneNote, and Outlook (or $860 with Publisher and Access). Want to upgrade after five years? Add another $230.

Final Verdicts on Office 365 vs. Office 2016

If you only need Word, Excel, and/or PowerPoint:

  • Office 365 is best value for one year.
  • Office 2016 Home & Student is best value for five or 10 years.

If you only need Word, Excel, PowerPoint, and Outlook:

  • Office 365 is best value for one year.
  • Office 2016 Home & Business is best value for five or 10 years.

If you also need Publisher and Access without OneDrive or Skype:

  • Office 365 is best value for one year.
  • Both are about the same for five years.
  • Office 2016 is best value for 10 years.

If you also need OneDrive or Skype without Publisher or Access:

  • Office 365 is best value for one year.
  • Without Outlook, both are about the same for five years. With Outlook, Office 365 is best value for five years.
  • Office 2016 is best value for 10 years. Unless you upgrade at the five year mark, in which case Office 2016 is only better value without Outlook.

If you need all of the above:

Did this article help you decide between Office 365 and Office 2016 5 Good Reasons Why You Should NOT Buy Office 2016 5 Good Reasons Why You Should NOT Buy Office 2016 Should you buy the standalone package version of Office 2016? We present our case why we think you shouldn't and show you what you can do instead. Read More ? Which one are you going to use? Are there any other factors we missed? Share with us in the comments below!

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  1. David Conrad
    August 26, 2017 at 1:18 pm

    Thanks for making the comparison. One thing you might want to add is: which is the best value if you're going to be using the product for two years? Or three years? Or four years? Or six years? etc.